Regional court agrees to Netia's debt-reduction plan

After months of postponements of the case, the Regional Court (Sad Rejonowy) in Warsaw has finally accepted the debt-reduction agreement of Netia Holding, the second largest fixed-line telephone operator (in which the main shareholders are Swedish Telia and British fund Warburg Pincus). The accepted agreement gives the company some chance of avoiding bankruptcy. The agreement estimates debt reduction of 91.3% (covering obligations of zl. 3.62 billion) and payment of the remaining debts over 5 years starting from the end of 2007. In return for amortization of debts, Netia Holding's creditors will receive up to 317.7 million shares from a new emission - 91.5% of the company's capital - planned for September-October this year. Creditors will also receive new six year bonds to the value of euro 50 million for a nominal sum. According to the company's board, the anticipated implementation of the agreement will yield profits in 2008. So far, Netia Holding has recorded only losses, which in the first half of 2002 amounted to zl. 520 million. The company's own capital stood at minus zl. 850 million which in practice means being on the verge of bankruptcy. (Gazeta Wyborcza, p. 31) A.L.